FG pays ₦2tn to settle outstanding capital budget debts

The federal government has settled over N2 trillion in outstanding capital budget obligations from the 2024 fiscal year and has committed to prioritizing the prompt release of capital funds for 2025.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this announcement during a press briefing in Abuja on Thursday.

He emphasized that Nigeria is now “open for business” to international investors due to improved economic stability.

ADVERTISEMENT

“In the last quarter, we paid contractors over N2 trillion to clear outstanding capital budget obligations from last year,” Edun stated.

“Currently, there are no pending obligations that are not being processed and financed. Our focus will now shift to releasing capital for 2025.”

He insisted that government agencies should only engage in capital projects once funds have been properly authorized.

“Even with appropriations, government entities should only enter into binding commitments when funds are available and authorized for spending,” he added.

The minister pointed out several positive macroeconomic indicators, including a trade surplus exceeding $4 billion in the first quarter of 2025, a 9.8 percent growth in exports, stable exchange rates, and foreign reserves of $39 billion as of July.

He credited these improvements to the policy direction of President Bola Tinubu’s administration, which he believes has fostered “stable macroeconomic conditions that allow for planning and investment.”

Edun also mentioned fiscal reforms, such as stopping the unauthorized use of Ways and Means advances from the Central Bank, which he said has lowered the debt-to-GDP ratio from 52.1 percent to 38.8 percent following GDP rebasing.

Read also:

• Federal Government orders probe into FCSC recruitment, targets job racketeering
• Federal government allocates 1.43 trillion for South-East development since 2023- Ohanaeze
• Federal Government launches East-West Africa Air Cargo corridor to boost intra-African trade, cut export costs

“There have been no debits to Ways and Means since the beginning of this administration,” he noted, adding that gross revenues in the first half of 2025 were 37.4 percent higher than in the same period of 2024.

In related news, Edun explained that the federal government has enhanced resources available to state governments by repaying previous deductions from the federation account, thereby improving their fiscal capacity for capital investment.

“Since the first half of 2023, the combined fiscal balance of the states has increased from 1.8 percent of GDP to 3.1 percent — rising from N2.8 trillion to N7.1 trillion, which is a surplus,” he said.

He attributed this enhancement to the removal of subsidies and adherence to the rule of law in settling outstanding funds.

The minister also announced plans for Nigeria’s most extensive tax reform, set to take effect in January 2026, which will consolidate all tax laws into a single framework, eliminate over 50 overlapping taxes, and simplify compliance.

Additionally, he introduced a revenue optimization and assurance platform that will utilize technology, digitization, and artificial intelligence to centralize collections from ministries, departments, and agencies, prevent revenue leakages, and enhance financial intelligence.

Edun reaffirmed the government’s medium-term objectives.